Wednesday, February 11, 2009

Questions for Curatorial - Speaking of Rent...

Curatorial Director Dave answers your questions.

When did rent-control begin?

Rent regulation in New York City, meaning apartments that fall under either rent-control or rent-stabilization laws, dates to the early 20th century. During the Second World War, New York emerged as a crucial center both for the production and shipping of war materials, as well as for the mobilization of troops overseas. After a decade of depression, war industry jobs and the services that supported war industry workers attracted unemployed Americans to New York. But little new housing had been constructed during the Great Depression. This resultant demand for housing also drove rents to exorbitant levels. Indeed, in August 1943, soaring rents sparked a riot in Harlem.

In this context, legislated rent-control emerged as a war measure when the federal Office of Price Administration (OPA) declared the city a “defense rental area” with the aim of landlords to maintain fair rents. At the same time, tenant organizations agitated for a “freeze” on rent increases. On November 1, 1943, the OPA froze the rents of 1.4 million dwellings at the level of March 1, 1943.

When the war came to an end in 1945, tenant groups organized to defend themselves against unaffordable increases. While the OPA maintained rent-control until 1947, these tenant groups persuaded then Governor Thomas Dewey and Mayor William O’Dwyer to impose a system of rent-control on buildings built before 1947. This system mandated vacancy rates to be measured at 3-year intervals—a vacancy rate below 5 percent constituted a housing emergency that could justify a renewal of rent controls by the state legislature. Also under this system, landlords could be granted occasional rent increases of as much as 15 percent.

New York City resumed the administration of rent control in 1962. In 1967 and 1969, the city lifted rent controls on some high-rent apartments and instituted a new system entitled “rent stabilization” on apartment buildings with six or more dwelling units. Under rent stabilization, rent increases were left to self enforcement by landlords belonging to the Rent Stabilization Association.

Widespread fears of chronic housing abandonment led the legislature to weaken rent controls, allowing an increase of 15 percent and liking stabilized rents to a “maximum base” calculated according to a “reasonable” return on investment.

According to a 2003 article in the Gotham Gazette, there are approximately 1 million rent-regulated apartments in New York City today—about half of city’s total rental units.

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